There are many moving parts in a business, but founders might not need to focus on all of them to the same degree.
This sentiment is powerfully echoed in the business philosophy of Amazon founder Jeff Bezos, who has long advocated for a specific approach to achieving sustainable, long-term results: concentrate on the controllable inputs of your business, rather than getting fixated on the outputs. This perspective, which has been a cornerstone of Amazon’s own staggering growth, offers a crucial lesson for leaders and entrepreneurs navigating the complexities of the modern market.
Bezos illustrated this concept with a clear example, emphasizing how easily companies can fall into the trap of chasing metrics they can’t directly control. He stated, “I think if you focus on the controllable inputs to your business instead of the outputs, in the long term, you get better results. If somebody came up to me and said, ‘Jeff, I want your job to be to drive up the Amazon stock price and just manage that directly’… Now, this might sound ridiculous to some of you, but many companies actually do this. They actually go out and they try to sell the stock. That’s kind of the final output.”
Instead of this direct, and often futile, pursuit of an output, Bezos advises a more methodical approach: “It’s much better to say, ‘Okay, let’s not do that. That’s not going to be sustainable. It’s kind of a silly approach.’ What are the inputs to a higher stock price? You’d say, ‘Okay, well, free cash flow and return on invested capital are inputs to a higher stock price.'”
The key, according to Bezos, is to trace these inputs back to actions your teams can genuinely influence. “Okay, let’s keep working backwards. What are the inputs to free cash flow? You keep working backwards until you get to something that’s controllable – a controllable input. For free cash flow, a controllable input would be something like a lower cost structure.”
He then drills down further into tangible operational elements: “And then you back up from there and you say, ‘Okay, well, if we can improve our picking efficiency in our fulfillment centers and reduce defects – defects are very, very costly. Reducing defects at the root is one of the best ways to lower cost structure.'”
This granular focus transforms an overwhelming goal into manageable tasks. Bezos concluded, “That starts to be a job you would accept. If you’re a reasonable person, you would say, ‘I have no idea how to drive up the stock price. I can’t manage that directly. It’s not a controllable input.’ But you can say, ‘I can make your picking algorithms more efficient, and that will reduce cost structure.’ And then, you follow that chain all along the way. That’s what you do in all of these businesses.”
The Power of Controllable Inputs
Bezos’s philosophy highlights a fundamental truth in business management: sustainable success is built on a foundation of operational excellence, which is achieved by meticulously managing and improving the processes and factors that are within a company’s direct control. Focusing on inputs like cost structure, efficiency, customer satisfaction metrics (like defect rates), and employee productivity empowers teams. It gives them clear, actionable levers to pull, fostering a sense of ownership and accountability.
This approach inherently discourages short-term gimmickry aimed at superficially boosting outputs like quarterly earnings or stock prices. Instead, it cultivates a long-term perspective where consistent improvements in core operational inputs naturally lead to better financial results and shareholder value over time. It’s about building a robust engine, not just polishing the hood ornament.
A Wider Business Principle
The “inputs over outputs” mindset championed by Bezos aligns with several well-established business principles. It’s a close cousin to the concept of focusing on “leading indicators” (inputs and process metrics) rather than solely on “lagging indicators” (outputs like revenue or profit). Leading indicators give businesses a predictive view of future performance and allow for proactive adjustments, whereas lagging indicators only tell you what has already happened.
Moreover, this philosophy is deeply embedded in methodologies like Lean Management, which emphasizes continuous improvement (Kaizen) and waste reduction in processes – all of which are input-focused. Similarly, the Objectives and Key Results (OKR) framework encourages businesses to define ambitious objectives and then break them down into measurable key results, many of which are input-driven activities designed to achieve the desired outcome.
Amazon’s own “Day 1” culture, which Bezos famously cultivated, is another manifestation of this. It emphasizes remaining agile, customer-obsessed, and focused on invention – all inputs that drive the company’s long-term success. By concentrating on the things they could control and consistently improve, Amazon built a flywheel of growth that eventually produced the very outputs (like a high stock price) that Bezos cautioned against chasing directly. For any business aiming for enduring success, this focus on the levers within reach offers a powerful, actionable strategy.